Around one million Australian pensioners will receive up to $804 extra a year under changes to the way their incomes and assets are assessed.
The Federal Government will cut deeming rates following successive cuts to the official cash rate.
The move will affect more than 630,000 pensioners and another 350,000 people who receive other payments that are income-tested.
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From September, the deeming rate for the first $51,800 of a single pensioner’s financial investments and the first $86,200 of a couple’s will be cut from 1.75 per cent to 1 per cent.
For balances above those amounts, the deeming rate will be cut from 3.25 per cent to 3 per cent.
That should see affected singles with an extra $31 in their pockets each fortnight and couples with an extra $40.50.
Social Services Minister Anne Ruston says it’s good news for those pensioners.
“It will mean more money in the pockets of older Australians,” Senator Ruston said.
“The decision shows the Morrison Government has listened to and acted on the concerns expressed by older Australians who receive a part pension.”
But Labor frontbencher Richard Marles says pensioners have waited too long, and the cut doesn’t go far enough.
“I think pensioners today will feel shortchanged,” Mr Marles told Sky News.
“We’ve seen five reductions in the cash rate since the deeming rate was last changed four years ago back in 2015, in that time the cash rate has gone down 1.25 per cent.
“This is the first movement in the deeming rate we’ve seen since then and it is only a quarter of a percent, this is far too little, far too late.”